September 22, 2010

TO THE MEMBERS OF THE :

Re: Schumer – Van Hollen Campaign-Finance Bill

We write about the Schumer – Van Hollen campaign-finance bill, also known as the DISCLOSE Act, S. 3628, which Sen. Majority Leader Reid may attempt to take up this week. This legislation suffers from all of the problems raised below, and should not be mistaken for true campaign finance reform.

Unequal treatment of speakers. The DISCLOSE Act’s supporters do not deny that, to the extent the bill favored union speech over corporate speech, it would seriously depart from past campaign-finance legislation and would be unconstitutionally discriminatory. They claim, however, that the bill treats corporate and union speech evenhandedly. That is incorrect.

As an initial matter, the bill contains several provisions that expressly target corporate speech while exempting the same type of speech when it emanates from unions. These include a blanket prohibition on election-related speech by many government contractors, by TARP reci- pients (mostly small banks), and by domestic corporations that are minority-owned by foreign citizens (§§ 101, 102). These one-sided restrictions mean that if there were a significant political issue on which a covered company and its union disagreed, the union could speak about the mat- ter unfettered, while the company would operate under the burdens of Schumer – Van Hollen. To be sure, unions rarely hold government contracts, but they are heavily dependent on the gov- ernment in other ways, including through federal grants, collective bargaining agreements, and spending programs like Davis–Bacon. There are now more union members employed by the public sector than by the private sector (Steven Greenhouse, Most U.S. Union Members Are Working for the Government, New Data Shows, N.Y. TIMES, Jan. 22, 2010), and union LM-2 forms show that many unions spend a substantial portion of their funds on lobbying and cam- paign expenditures. Unions’ interests in who government leaders are, and what policies they pursue, are at least as great as corporations’, yet Schumer – Van Hollen leaves them essentially untouched.

Provisions of the bill that purportedly apply evenhandedly—such as the disclosure and disclaimer requirements (§§ 211, 214)—would also burden corporations while leaving unions largely unaffected. For example, the bill requires reporting of donations above $600. § 211(a). Because an average union member pays annual dues beneath that threshold—the average dues of the fifteen largest U.S. labor unions were $377 in 2004 (see Mark Brenner, Give Your Union a Dues Checkup, May 27, 2007, http://www.labornotes.org/node/908)—unions would seldom be required to disclose donors’ identities.Union donors would also routinely be exempted from the “stand by your ad” requirements, due to a $10,000 threshold added by the House. § 214. It is estimated that these new on-air disclaimers would take up to half of a 30-second ad—making it too costly for many to speak. It is provisions such as these that Senator Schumer and others have said will not merely disclose corporate speech but will “deter[ ]” it. Remarks by Senator Schu- mer at Press Conference Announcing Campaign Finance Bill (Feb. 11, 2010). Unions are among the most active participants in the political process. They spent more than $450 million in the 2008 elections, will spend more than $150 million this Fall, account for 40% of the campaign-related spending so far this year (corporations account for less than 15%), and recently spent $10 million in Arkansas attempting to defeat a single Senator. See, e.g., T.W. Farnam, Unions Outspending Corporations on Campaign Ads Despite Court Ruling, WASH. POST, July 7, 2010. Any bona fide attempt at campaign-finance reform would address unions and corporations equally, as campaign-finance legislation has in the past. Schumer – Van Hollen does not. Speaker Pelosi and the President have praised the bill’s regulation of corporate speech while omitting reference to purported effects on unions. Statement by the President on the DISCLOSE Act (“[T]his legislation will shine an unprecedented light on corporate spending in political campaigns.”); Pelosi Statement on Passage of DISCLOSE Act by House Administration Committee (“This bill requires corporations to stand by their ads in the same way candidates do[.]”).

The bill’s discriminatory approach is further reflected in the special last-minute exemp- tion for the National Rifle Association (§ 211(c)). Added to secure the NRA’s support for the bill in the House, the exemption was expanded in response to widespread criticism to include a small number of additional groups, including the . Thus, the NRA would be able to engage in election-related speech unencumbered by the bill’s new requirements, whereas the Brady Campaign or other gun-control—or pro gun-ownership—groups would be saddled with the bill’s requirements. This Nation’s voters understand that a bill loaded with special favors for powerful lobbying interests is not true campaign-finance reform. It is a bad bill designed to at- tract a majority by advantaging some groups at the expense of others.

Partisan nature of the legislation. Supporters of the legislation claim that it is biparti- san, but in fact it is an incumbent-protection shield for members of one party. In the House de- bate, Representative Henry Johnson of Georgia said that if the bill were not passed “we’ll see more Republicans getting elected, [] local, State, and Federal.” Senator Schumer has expressed urgency for enacting the bill in time to affect the 2010 elections. CQ Financial Transcripts, Se- nate Democrats Hold News Conference on Corporate and Labor Spending in Elections, Apr. 29, 2010. Representative Van Hollen has posted on his website an article stating that “congressional Democrats are . . . anxious” to shut down corporate participation “as much as they . . . can . . . as fast as they can” in the 2010 elections. David S. Broder, Congress Prepares for a Battle over Campaign Finance, WASH. POST, Jan. 31, 2010, at A21.

Differences from McCain–Feingold. The bill stands in stark contrast to the Bipartisan Campaign Reform Act of 2002 (commonly known as McCain–Feingold or BCRA). BCRA was the culmination of extensive, patient deliberation and bipartisan cooperation. Four years of con- gressional research and debate occurred between the Senate Committee on Governmental Af- fairs’ report in 1998 recommending comprehensive campaign-finance reform, and the 2002 enactment of McCain–Feingold. The bill had bipartisan support in the House and Senate and was signed by a Republican president. By contrast, the DISCLOSE Act has no Republican Se- nate co-sponsors, one of only two Republican co-sponsors voted against the bill in the House, and the bill is being rushed through Congress to influence the fall elections.

2 The bill is not a bona fide response to Citizens United. The bill is being characterized as a response to the Supreme Court’s decision in Citizens United v. FEC. That is incorrect, in part for reasons already addressed. In addition, the bill would enlarge the pre-Citizens United period in which “electioneering communications” are required to be paid for by a PAC and expand the pre-Citizens United definition of “,” thereby adding burdens on corpo- rate speech that did not exist prior to Citizens United.

Citizens United has not created such a dire threat that emergency, ill-considered legisla- tion must be enacted now. Approximately half the States allow unlimited corporate independent expenditures in elections. Moreover, the bill will have no practical effect on spending by unions, who are among the most zealous participants in the political process. “The Citizens United case has taken the lid off, and so we can use our soft money for express advocacy directly,” the politi- cal director for AFSCME has said. Eliza Newlin Carney, Labor’s Uphill Climb This Year, NAT’L J. MAG., June 26, 2010. The aim of the Schumer – Van Hollen bill is to enable unions to engage in this political activity unfettered in the fall elections, while silencing other, often con- tradictory, voices in the debate.

Some supporters of the bill have argued that without the Schumer – Van Hollen bill, new- ly formed anonymous front organizations would be able to run election-related advertisements without disclosing who funds them. In fact, however, the Act reaches far more broadly. It would severely undercut the ability of longstanding, well-known organizations like the under- signed groups to engage in election-related speech. And its provisions could require the CEO of a company that gave general-treasury funds to a business association, with no intention of in- fluencing an election, to nonetheless appear on television and make an on-air disclaimer.

Constitutionality. The constitutional problems presented by Schumer – Van Hollen are profound. It is elementary that speakers should not be subject to different treatment by the gov- ernment based on their identity or the content of their message. First Nat’l Bank v. Bellotti, 435 U.S. 765, 776-77 (1978); Davis v. FEC, 128 S. Ct. 2759, 2774 (2008). Yet this is what Schumer – Van Hollen does. Its blanket prohibition on speech by select groups of corporations, favorit- ism for politically powerful groups like the NRA, and avowed intent to “deter” speech through onerous and time-consuming disclosure requirements all violate basic First Amendment prin- ciples. One of the legislation’s principal sponsors in the House—Representative Capuano—has admitted that he expects portions of the law to be struck down by the courts. Video Transcript of Hearing before the Committee on House Administration, at 1:22:10 (May 6, 2010). Unlike with McCain–Feingold, the bill’s supporters have not even attempted to develop the record to support such far-reaching legislation—nor could they have, given the haste with which they have at- tempted to rush the bill through Congress.

* * *

Although campaign-finance legislation has assuredly provoked strong disagreements in the past, it has been introduced in the Senate previously with bipartisanship and evident good intentions for the American political process. By contrast, the so-called DISCLOSE Act comes to the Senate already freighted with the backroom deal-making with powerful interests that bare- ly won it passage in the House, and which is the antithesis of campaign-finance “reform.” The

3 favoritism and partisanship evident in the bill’s journey through the House permeate its provi- sions and its substance. Whatever one may think of the Citizens United decision, and however important it may be to bring as much transparency as possible to the political process, this bill is not the answer. We urge you to oppose this legislation.

Respectfully,

Affiliated Chambers & Business Organizations of Hawaii Agricultural Retailers Association Airforwarders Association Albany Area (GA) Chamber of Commerce Albany Area (OR) Chamber of Commerce Alexander City Chamber of Commerce American Apparel & Footwear Association American Architectural Manufacturers Association American Association of Exporters and Importers American Bakers Association American Chamber of Commerce Executives American Chemistry Council American Council of Engineering Companies American Foundry Society American Frozen Food Institute American Gas Association American Hotel and Lodging Association American Insurance Association American Lighting Association American Meat Institute American Moving & Storage Association American Petroleum Institute American Trucking Associations American Watch Association Anaheim Chamber of Commerce Arizona Chamber of Commerce & Industry Arizona-New Mexico Cable Communications Association Arkansas State Chamber of Commerce/Associated Industries of Arkansas Associated Builders & Contractors of Western Washington Associated Builders and Contractors, Inc. Associated Equipment Distributors Associated Food Stores, Inc Associated General Contractors Associated General Contractors of California (AGC) Associated Industries of Massachusetts Associated Oregon Industries Associated Wire Rope Fabricators Association Benefits Corporation Association of Commerce & Industry of New Mexico

4 Association of the Nonwoven Fabrics Industry Association of Washington Business Automotive Parts Remanufacturers Association Barrington Area Chamber of Commerce Bismarck Mandan Chamber of Commerce Boise Metro Chamber of Commerce Brawley Chamber of Commerce Brea Chamber of Commerce Brick Industry Association Buckeye Valley Chamber of Commerce Buffalo Niagara Partnership Builders Exchange Inc. Building Owners and Managers Association International Bullhead Area Chamber of Commerce Business Coalition for Fair Competition Business Council of Alabama Business Roundtable Cabarrus Regional Chamber California Chamber of Commerce California Retailers Association Camarillo Chamber of Commerce Canandaigua Chamber of Commerce Catoosa County Chamber of Commerce Cedar City Area Chamber of Commerce CenTex Chapter IEC Central Alabama Chapter IEC Central Indiana IEC Central Louisiana Chamber of Commerce Central Missouri IEC Central Ohio AEC/IEC Central Ohio Chapter Associated Builders & Contractors, Inc. Central Pennsylvania Chapter IEC Central Washington IEC Centre County IEC Cerritos Regional Chamber of Commerce Chicagoland Chamber of Commerce Clovis Chamber of Commerce Columbus Area Chamber of Commerce Construction Industry Round Table (CIRT) Consumer Electronics Association Crop Protection Association of North Carolina Destination Marketing Association International Direct Marketing Association Draper Utah Chamber of Commerce East Tennessee IEC Eastern Washington Chapter, IEC

5 Eau Claire Area Chamber of Commerce Edison Electric Institute El Centro Chamber of Commerce & Visitors Bureau Equipment Marketing & Distribution Association Federation of American Hospitals Flagstaff Chamber of Commerce Florida Chamber of Commerce Florida Fertilizer & Agrichemical Association Foundry Association of Michigan Fremont Area Chamber of Commerce Fullerton Chamber of Commerce Futures Industry Association Gateway Chambers Alliance Georgia Industry Association Georgia Mining Association Gillette Chamber of Commerce Greater Durham Chamber Chamber of Commerce Greater Effingham Chamber of Commerce & Industry Greater Fresno Area Chamber of Commerce Greater Irving-Las Colinas Chamber of Commerce Greater Montana IEC Greater New Haven Chamber of Commerce Greater Phoenix Chamber of Commerce Greater Springfield Chamber of Commerce Green Bay Area Chamber of Commerce Gwinnett Chamber of Commerce Hampton Roads Chamber of Commerce HARDI - Heating, Airconditiong & Refrigeration Distributors International Henderson Nevada Chamber of Commerce Hilton Head Island – Bluffton Chamber of Commerce Howard County Chamber of Commerce Huntington Regional Chamber of Commerce Huron County Chamber of Commerce IEC Atlanta Chapter IEC Chesapeake IEC Dakotas, Inc. IEC Dallas Chapter IEC Florida West Coast IEC Fort Worth/Tarrant County IEC Georgia Chapter IEC Greater St. Louis IEC Hampton Roads Chapter IEC National IEC NCAEC IEC New England IEC of Arkansas

6 IEC of East Texas IEC of Greater Cincinnati IEC of Idaho IEC of Illinois IEC of Kansas City IEC of Northwest Pennsylvania IEC of Oregon IEC of Southeast Missouri IEC of Texoma IEC of the Bluegrass IEC of the Texas Panhandle IEC of Utah IEC Southern Arizona IEC Southern Colorado Chapter IEC Southern Indiana Chapter-Evansville IEC Texas Gulf Coast Chapter IEC Western Reserve Chapter IEC, Inc. El Paso Chapter IEC, Inc. Lubbock Chapter IEC, Inc. San Antonio Chapter IEC, South Florida Chapter, Inc. IECA Kentucky & S Indiana Chapter IECA of Arizona IECA of Nashville IECA of Southern California, Inc. IEC-OKC, Inc. Independent Electrical Contractors, Inc Indiana Cast Metals Association Indiana Chamber of Commerce Inland Pacific Chapter Associated Builders & Contractors International Association of Amusement Parks and Attractions International Dairy Foods Association International Foodservice Distributors Association International Franchise Association International Housewares Association ISSA - The Worldwide Cleaning Industry Association Johnson City Chamber of Commerce Johnson City-Jonesborough-Washington County Chamber of Commerce Kailua Chamber of Commerce Kankakee Regional Chamber of Commerce Kansas Chamber of Commerce Kansas Food Dealers Association Kentucky Chamber of Commerce Kingdom of Callaway Chamber of Commerce Lake Havasu Chamber of Commerce Laredo Chamber of Commerce

7 Little Rock Regional Chamber of Commerce Los Angeles Area Chamber of Commerce Louisiana Association of Business and Industry Lubbock Chamber of Commerce Lynchburg (VA) Regional Chamber of Commerce Management Association for Private Photogrammetric Surveyors Marine Retailers Association of America Maryland Chamber of Commerce McLean County (IL) Chamber of Commerce MEC IEC of Dayton Metals Service Center Institute Michigan Chamber of Commerce Middle Tennessee Chapter - Associated Builders and Contractors, Inc. Mid-Oregon Chapter IEC Mid-South Chapter IEC Midwest IEC Mississippi Chapter - Associated Builders and Contractors, Inc Missouri Chamber of Commerce and Industry Mobile Area Chamber of Commerce Modesto Chamber of Commerce Montana Chamber of Commerce Montana IEC Montgomery Area Chamber of Commerce (AL) Montgomery County (PA) Chamber of Commerce Morrisville Chamber of Commerce Mount Vernon-Lee Chamber of Commerce National Association of Chemical Distributors National Association of Home Builders National Association of Manufacturers National Association of Mutual Insurance Companies National Association of Printing Ink Manufacturers, Inc. National Association of Wholesaler-Distributors National Federation of Independent Business National Grain and Feed Association National Marine Distributors Association National Marine Manufacturers Association National Mining Association National Paper Trade Association National Poultry & Food Distributors Association National Ready Mixed Concrete Association National Restaurant Association National Retail Federation National Roofing Contractors Association National Stone, Sand, and Gravel Association Nebraska Agri-Business Association New Jersey IEC

8 New Jersey Motor Truck Association Niagara USA Chamber North American Equipment Dealers Association North Dakota Chamber of Commerce North Las Vegas Chamber of Commerce Northern Kentucky Chamber of Commerce Northern New Mexico IEC Northern Ohio ECA NW Washington IEC Ohio Cast Metals Association Ohio Chamber of Commerce Oklahoma Agribusiness Retailers Association Oshkosh Chamber of Commerce Outdoor Power Equipment and Engine Service Association Oxnard Chamber of Commerce Palm Desert Chamber of Commerce Pennsylvania Chamber of Business and Industry Pennsylvania Foundry Association Perry Area Chamber of Commerce Petroleum Equipment Institute Plattsburgh-North Country Chamber of Commerce Printing Industries of America Public Service Research Council Puerto Rico Chamber of Commerce Puget Sound Washington Chapter IEC Pullman Chamber of Commerce Regional Black Chamber of Commerce SFV Renewing American Leadership Reno Sparks Chamber of Commerce Retail Grocer’s Association of Kansas City Retail Industry Leaders Association Rhode Island Chamber of Commerce Coalition Rio Grande Valley IEC, Inc Rocky Mountain Agribusiness Association Rocky Mountain Chapter - Associated Builders and Contractors, Inc. Rocky Mountain Chapter IEC Rome Area Chamber of Commerce Rowan County Chamber of Commerce Salisbury Area Chamber of Commerce San Jose Silicon Valley Chamber of Commerce Schuylkill Chamber of Commerce Scottsdale Area Chamber of Commerce (AZ) Small Business & Entrepreneurship Council Society of American Florists South Carolina Fertilizer & Agrichemicals Association. Southeast Pennsylvania Chapter - Associated Builders and Contractors, Inc.

9 Southeast Texas Chapter - Associated Builders and Contractors, Inc. Southern Crop Production Association Southern New Mexico IEC Southern Wayne County Regional Chamber St. George Area Chamber of Commerce Tempe Chamber of Commerce Tennessee Chapter, Associated Builders and Contractors, Inc. Texarkana USA Chamber of Commerce Texas Association of Business Texas State IEC Textile Care Allied Trades Association The American Financial Services Association The Business Council of New York State, Inc. The Business Council of Westchester The Chamber of Commerce of West Alabama The Chamber of Commerce serving Middletown, Monroe, and Trenton (OH) The Chamber of Medford/Jackson County The Colorado Association of Commerce and Industry The Greater Elkhart Chamber of Commerce The Greater York Region Chamber of Commerce The Lodi District Chamber of Commerce The Otsego County Chamber (NY) The Remanufacturing Institute The State Chamber of Oklahoma Transportation Intermediaries Association Tri State IEC Tri-City Regional Chamber of Commerce Truck Renting and Leasing Association Tucson Metropolitan Chamber of Commerce U.S. Chamber of Commerce U.S. Travel Association Warren County Regional Chamber of Commerce Washington Automotive Wholesalers Association WECA IEC Western Colorado IEC Wichita Chapter IEC Winston-Salem Chamber of Commerce Wisconsin Crop Production Association Wisconsin Manufacturers & Commerce 60 Plus Association

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